Chancel Repair Insurance - A necessary evil for householders in current times?

Despite being a lasting remnant from medieval times, chancel repair liability can hit the present day property owner at any time. Lorna Ganley, Associate and head of residential conveyancing at Harvey Ingram Solicitors continues: -

"Since before the Reformation churches in England and Wales have been ministered by either a vicar or a rector. Historically, the tithes or income from rectorial lands were paid to the rector but both the rector and parishioners were required to split the cost of the repair of the church; the parishioners being responsible for the western end of the church and the rector being responsible for the chancel.

Since these times the introduction of legislation has seen the parishioners responsibilities transferred back to the church but when the land was sold off into private ownership the responsibility to repair the chancel remained with the rector.

Chancel repair liability is still with us today and obliges those property owners whose properties fall within a tithe district on historic parish records to potentially contribute or fund the maintenance and upkeep of churches. The liability attaches to some 5,200 pre-reformation churches in England and Wales and under the Chancel Repairs Act 1932, the Parochial Church Council (PCC) has the power to require those householders falling within the above category to meet or contribute to the cost of repairing the church chancel.

The issue hit the headlines with the notorious case of Aston Cantlow and others v Wallbank (2003) (House of Lords) involving a parish in Stratford upon Avon. The Wallbanks inherited a plot of land in Warwickshire which turned out to be former rectorial land and in 1990 received a bill from a church nearby in Aston Cantlow (land does not necessarily need to be adjacent to an identifiable church for liability to exist) requesting a payment of £6,000 towards window repair. A lengthy and protracted legal battle with the Diocese for Coventry subsequently commenced which dragged on for some 18 years and culminated in the couple being ultimately held liable for the bill. The case finally went to the House of Lords and the couple were ordered to pay for the repairs (to include the deterioration that had taken place over the period of the court battle) exceeding £95,000 as well as the legal costs for both sides estimated at just under £230,000. This decision provided evidence of enforceability of this ancient law beyond a doubt and indeed the Wallbanks property has since been put up for auction to settle the bill.

Within the judgment the House of Lords highlighted on several occasions that despite the 1932 Act being still being current law the statute was archaic to say the least and called upon the Law Commission to alter the law surrounding this liability.

In response, the government passed a Transitional Provisions Order covering chancel repair liability which took effect when the Land Registration Act 2002 came into force on 13th October 2003. This Order preserves chancel repair liability within land registration for a period of 10 years and in layman's terms means in that the PCCs now have to register chancel repair liability against affected property titles or by way of a caution against first registration with unregistered land before 13th October 2013. After this date, any liabilities that are not clearly recorded on titles will be unenforceable.

In the wake of Wallbank it is easy to see why the church want this legislation to continue. It is estimated that the Church of England spends approx £120m a year alone on repairs. Indeed the Legal Advisory Commission which advises the dioceses on legal issues have circulated national guidance advising the PCC that it has a fiduciary duty to establish whether parishioners could be billed for chancel repair as a method of recouping some of the £1B deficit which they currently have. This stance is obviously countered against that of the church wanting to avoid bad publicity should they seek to enforce the law in this way and by the same token undermining the very ethos of the church by targeting the average homeowner. In effect the whole situation is a minefield but from a householders point of view this type of liability is a very real and present threat which we need to guard against. As an example of how serious a problem this poses, it is reported that the church have currently spent some £500,000 advertising for staff in the Law Gazette to set up a special department to ensure that those properties at risk are registered and therefore financially liable!

The existence of chancel repair liability can be difficult to discover because of the sheer size and fragmentation of parish records however it is relatively easy to spot whether your property is at risk. The most commonly used search is the Chancel Check which most solicitors will carry out as standard when you purchase a property in England and Wales (please specifically request that this search is carried out should it not be referred to by your conveyancer). The cost of this search is relatively small, i.e. as little as £15-20 and where the solicitor reports on the data that there is a risk of liability they will suggest taking out an insurance policy. This can cost from as little as £60 depending on the value of your home, will provide cover for a 25 year period and will also be capable of being passed on to a future purchaser when you sell the property. A more detailed search can be carried out at the National Archive but this costs nearer to £200 to commission.

Many have argued that indeed the only winner to come out of this situation is the insurance companies. Clients often feel that the likelihood of a claim ever being made against them under such an old law is that unlikely that an insurance policy is an unnecessary expense and a waste of money. As a conveyancer who deals with this type of liability on a daily basis I would err on the side of caution. In real terms a house purchase is likely to be the biggest financial investment many of us ever make and indeed insurance is relatively cheap considering the size of potential claims that you could be faced with if you are one of the unlucky ones!!! Insurance premiums for this type of cover will also no doubt rocket the closer we get to 2013 and therefore it is easier to purchase one sooner rather than later otherwise beware it could be you!"

For more information on Chancel Repair Insurance, please Contact the office.